Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

This is just a wild attempt to put 2+2 together. Do you think that money flying our of bond funds has floated crude oil contracts? They look to be moving in inverse direction to each other. I wonder what you see where you are.

Had way too much exposure to financial TV this week. Wondering why people who were so wrong for so many years are still headlining guest spots. Not to mention, the insidious assumptions that everyone tuned-in is a neo-liberal right winger.

It seems that interest rates and commodity prices will be the big stories. Also the European issues with regard to ratings & possible (?) defaults. Always wondering how much credibility the ratings agencies even have at this point. They have been somewhat immune from too much criticism & they truly deserve a shot.

Bottom line, our economy always seems to keep chugging, but there is enough uneasiness all around. Maybe that is bullish.

If any of these terrorists who are alleged to be familiar with American society really were, they would have long ago thought of using a few suicide car bombs at the entrances to major shopping malls just before Black Friday. Very cheap and very hard to guard against. Would have shut down Christmas shopping almost completely.

Student loans are a huge stumbling block to future growth. All those young people ain’t gonna be buying houses and iPads.http://www.cnbc.com/id/40680905
What burns me more is that we lent/gave billions to the lenders that are harrassing these students; would have been much better to have used the money to help the students pay their loans, which would have helped the lenders out also.

Being a muni guy I’m wondering if we are going to see a big city or county “blow up” in 2011. So far the problems have been in the small cities (Vallejo, Harrisburg) but the longer this malaise goes on the harder it is for these large cities. Likely states for this to happen iclude CA,FL and IL.

Being a muni guy I’m wondering if we are going to see a big city or county “blow up” in 2011. So far the problems have been in the small cities (Vallejo, Harrisburg) but the longer this malaise goes on the harder it is for these large cities. Likely states for this to happen iclude CA,FL and IL.

Just want to say “THANKS!” to our host and the regular contributors. I rely on a number of sources for information with this one very much at the top of the list. The quality of the posts and the overall discourse here is something special.

Just wondering how long it will take for the real estate bubble in China to burst. Are Chinese investors actually enthusiastic about buying more newly constructed homes/apartments at a time when 60 million housing units are vacant?

I’m concerned that the media spin/financial blog zeitgeist is that we’re out of the woods (or nearly so), economically. I wouldn’t call exuberance, exactly, but it certainly isn’t rational or realistic. I am aware of the old chestnut that the markets can stay irrational longer than one can stay solvent, but at some point, that irrationality has to end, and the consequences are likely to make the past couple of years look like the good old days. Some day, we’re going to have to balance the books. So far, our “solutions” have only appeased and temporarily placated the 800 lb. debt gorilla in our collective living room.

For all intents and purposes, the rule of law failed completely under Bushco (the first sign it was coming was the pardon of Nixon, the second was Reagan getting away with the Iran-Contra treason), so that’s already happened. Our legal system makes the old Soviet gulag system look like a mom and pop operation. The upper class is already, demonstrably, above the law.

As for the disruption of commerce, many folks who believe they are above losing it all would/will be very surprised that they didn’t make the cut as part of the ruling class.

For me (having been raised in what can only be described as poverty — in the Pax American era sense), me and mine would be fine, but I’d also be very leery of those who have never had to scrape by. Middle class compression into the lower class would result in lots of folks going freekin’ nuts.

Jumped on SU with you today Barry. I have been wanting to get into energy for a while now just for insurance against common man energy price increases out there. Your SU chart looked compelling enough to start building a legacy stake. I’ll trade accordingly. The only downside is the smallish dividend. It does beat the dividend in most PMs so from that perspective, no complaints

I’d generally agree that the rule of law has been on the decline since the 1960s as applied to political and Wall Street types—regardless of political party and continuing to today. But while you were probably indulging in hyperbole, a little time reviewing the history of the Soviet gulag system would likely leave you blushing at your comparison with the U.S. legal system. I’ve heard stories that make Guantanamo sound like a resort by comparison—and that’s not hyperbole.

“Middle class compression into the lower class would result in lots of folks going freekin’ nuts.”

A direct hit and the implications of this have me worried. I’ve seen a couple of examples of apparently middle class people that are borrowing from the remnants of their 401k accounts to avoid losing their homes, but they have also done their traditional Best Buy, Macy’s and Target binges for the holidays (can a life without Blu-Ray be worth living?). I find bizarre the idea that we celebrate rising retail sales to a populace that lives paycheck to paycheck and can’t rationally ever contemplate retirement. When all outlets for denial are exhausted the manifestation of “freekin’ nuts” could be very frightening.

@JoJo That ain’t the right 15MM. More productive folks offshore. If they retooled, who knows.

@mike in Nola bigger stumbling block is public schools cutting days for budget. Empire in decline. Universities can still educate internationals. We’ve been “run by bankers” since there have been banks…not a new issue or any new outcomes. It’s not different this time.

If I were a producer or reseller I would be looking for any way possible to increase prices. Margins have been generally too tight for too long — strong motivation to move them up. (You know things are tight when the major accounting firms cut margins, something they have done for awhile now.)

That said, the majority of consumers are just leaving their sickbed, standing on wobbly legs (e.g., holiday spending up but cautious on big ticket items). How much of a 10% commodity increase finds its way to the consumer and how will that impact total spending? Then there is…let’s see: a possible double-dip, stubborn unemployment, the Chinese (internal bubble? currency manipulation – yes), Europe (lord, forgive us our sins as we will never overspend our public coffers again), oh..and a changing of political guard (or at least different colored uniforms).

We have pent up demand for higher margins, an overabundance of currency to drive up inflation, a consumer who would love to be able to spend more, and loosening credit (per my spam folder)…but we still aren’t quite sure where the higher margins will appear and stick (i.e., higher net margin). Looks like hard work ahead.

Just a bit about Christmas. In some households it’s more a spiritual day than merchantile. TBP post on “Give and you will receive” was appreciated, it balanced it out the gift lists nicely. Curious about Christmas around the world?

Maybe a little hyperbole, but it’s hard to know exactly what percentage of the USSR population was in the Gulag system. That said, we’re currently #1, with a bullet. With our massive, complex, and loophole-ridden Criminal Code, I wouldn’t be surprised if the average American hasn’t unknowingly committed a felony.

After WWII science and engineering delivered huge progress and their methods gained great respect. At the same time corporate media were for the most part clearly devoted to similar approaches of finding truth/facts and delivering them in an understandable way to the public. In the political system the manipulation did not occur that much at the level of facts but rather at the level of interpretation; because they knew that any attempt at faking facts would uniformly be revealed/condemned by media and get a very negative response from the public. Experts were generally trusted and importantly also generally trustworthy – when they were wrong it was usually the result of honest errors.

This did not work so well for the predators, those who collect more for themselves with little or no ethic/moral constraint on how they get it (or what they do to other people in the process of getting it). Predators start up with the conclusion (whatever gives me a better chance to get more) and work back to arguments that will support that conclusion, and then cherry-pick, manipulate or invent “facts” that support their arguments. This last step really gets in trouble in a society where truth and facts are being collected and respected.

Therefore, predators initiated an attack on experts and expertise to soften peoples trust in sources of complicated facts. Mistakes and misconduct from individual experts were blown up to “prove” that you cannot trust ANY expert. They build their own think tanks where “experts” used perverted semi-scientific approaches to produce “facts” that could support the predators forgone conclusions. Similarly, they build their own media networks and invaded existing networks, replacing real truth seeking journalism with a perverted propaganda format that would have made a 1930’ies dictator proud. Finally they found ways to drive out politicians with integrity and replace them with some that would serve their money masters before they serve their constituents.

The results have been some huge mistakes of great cost to society (although clearly enriching the predators). Trickle down was tried and failed, twice. Leaving the predators “deregulated” and free of government supervision has been costly at so many levels. Huge increases in expenses were incurred when certain government functions inappropriately were privatized. Our health care cost is exploding and quality dropping because of fear of European style “soci@lised” medicine. We invaded Irak in a trillion dollar mistaken war, because we feared weapons of mass destruction that were not there. The list of costly mistakes that would not have happened in a society dedicated (at all levels) to finding facts and creating policy based on them is much longer.

It remains to be seen if we in a competitive world can afford to continue on this path.

This nation is dying the death of 1,000 cuts. We can’t even summon the will or attention span to deal with some of the bigger ones – drugs (cocaine, etc.), foreign military entanglements, trade deficit and oil. As long as we can borrow overseas and continue to transfuse those dollars into our economy, we seem not to notice the bleeding. Pathetic.

Republicans ran on fiscal responsibility, and first thing that gets done after elections is extension of all Bush tax cuts. We need a new electoral system that doesn’t limit primaries to party. We really don’t have a democracy when middle of the road voters have no choice about the final candidates. We really don’t have a democracy when majority of votes are ignoring science and facts. We really don’t have a democracy when there isn’t a “middle” media. We’ve kind of got a monarchy (Bush being main example of national politics, Al Gore’s family, Blunt in Missouri), kind of have an oligarchy (Goldman’s revolving door at Treasury). We are getting beat by Asia and China because of the lack of leadership. Our leaders are in business and they are promoting capitalism to get theirs, not to best direct resources.

I’m of the opinion that corn is only half way to the top. You will see 6-7 dollar corn (actually has 6 in front of it now, I guess). Looking forward to Christmas and enjoying the holidays. White Christmas here. :)

@Afthought Says:
December 23rd, 2010 at 8:20 pm
Had way too much exposure to financial TV this week. Wondering why people who were so wrong for so many years are still headlining guest spots. Not to mention, the insidious assumptions that everyone tuned-in is a neo-liberal right winger.

Didn’t mean to cast a gloom on everything. Looks like I made the first negative comment.

Vilgrad, BusSchDean and Chief: The speculators have driven up prices on the exchanges, but, other than gasoline (and we don’t drive a hell of a lot), I haven’t seen much effect. We eat mostly at home, with me doing the shopping and most of the cooking. If you look for specials, prices haven’t risen significantly. I suspect the increases we’ve seen are more related to transportation than materials cost. David Rosenberg pointed out a month ago that margin compression must be happening and Kroger’s chairman recently confirmed that the national producers like General Mills are eating a lot. If they try to pass on the cost, people just won’t buy.

LtData: Didn’t say I was into shopping. Can’t say I’ve done any significant Christmas shopping in a decade. But if you want to hurt America, that would seem to be the place to do it. Here in Houston, the favorite pastimes seem to be going to malls and going to movies, both easy targets.

BTW, what’s really troubling me now is “Who is Harrison Geillor?” Picked up a copy of The Zombies of Lake Woebegotten at the library the other day thinking it was by Garrison Keillor and it is extremely amusing. It appears to be a parody of a Garrison Keillor book. Never have read one, but this book is good.

The Stimulus is fully spent and committed at year end and we still have 9.8% unemployment and a recovery that is imperceptible on Main street, I wonder if the end of Stim will be felt/show up as we move ahead without it.

Admin claims it added/saved 3.3M jobs so we’d be at 12-13% unemployment now without it. I’ll take that claim with a couple grains of salt but does unemployment go UP now that stimbucks have been spent (except for the multi-year contracts which have probably made most of their hires already).

One interesting thing today is the amazing divergence of opinion on the stock market. You hear all kinds of statements about the ‘record bullish levels’, but also that the love affair with stocks has ended, that record outflows continue, that retail investors have not, and will not come back.
Something does not add up.
One of the more interesting observations was one on this blog a couple of months back by dead hobo. He noted that there are not enough participants in the market today to crash it. The point is: herd mentality may matter, but herd mentality is also related to the size of the herd.

I was about to write a note regarding the troubles that may lay ahead, but realized that this is not the time of year for that.
Now is the time to look back and wonder at all the good that has been. The world is really a marvelous place. I hope that everyone, in what ever place that you may be, can step back, have a good look around, take a deep breath and enjoy the moment of this season.

Just a big thanks for my great Christmas gift. I saw your Audiophile blog that had the Monster headset/buds and subsequent flag that Amazon had cut the price to $59. My wife bought them for me for Christmas and I got them in two days (in Phoenix, we have an Amazon distribution center). Talk about good response, definition and just pure music enjoyment.

Thanks and Happy Holidays!!

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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